Tag Archives: pension reform

Retirement Benefits Are to White Collar Crime and Generational Inequity What Handguns Are to Street Crime

Red State, Blue State, Democrats, Republicans, anti-tax advocates, public unions, public sector, private sector, federal, state and local and even in Europe.  Retirement and old age benefits are promises about the far off future, allowing any and all to use them as a tool to rip people off and make a getaway before the heist is discovered.  At the state and local government level, all over the U.S., one finds the generations now retired or about to retire promised themselves far more than they had been willing to pay for, leading to crises of various kinds. But always there is the assumption that the older generations that created the problem and benefitted from it can’t participate in sacrifices needed to prevent disaster.

The first response is always the union-friendly choice to drastically cut the pay and benefits of new hires, in order to offset the soaring cost of benefits for those cashing in and moving out.  Screwing the millennials as part of the “screw the newbie, flee to Florida” cycle that goes on and on.  “If you don’t like it, don’t take the job; take some other job that also pays 25 percent less than the Baby Boomers were paid for the same work,” as Federal Reserve Bank of New York research has shown.

https://www.wsj.com/articles/playing-catch-up-in-the-game-of-life-millennials-approach-middle-age-in-crisis-11558290908

But when that isn’t enough, the next proposal is a “pension freeze.” Middle-aged workers, now mostly the last of the Boomers in those in Generation X, get to keep the pension benefits they have earned so far, but are not allowed to accrue any new benefits at the rate they were promised.  They are allowed to contribute to a 401K instead.  “If you don’t like it, quit and take another job for 15 or 20 percent less than most Boomers and members of the Silent Generation were paid, if someone will hire you.”

That’s fair, isn’t it?  No it is not!

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Public Employee Pensions in 2012, 2002 and 1993: Census Bureau Data

The Governments Division has released data on state and local government pension plans for FY 2012, and I have downloaded and compiled it for that year and a decade and two decades earlier. The data shows the arrival of a crisis in public employee pensions, with soaring public employee retirement costs causing or threatening municipal bankruptcy and leading to tax increases, service cuts, and reductions in benefits for future (and in some cases current and past) government employees. All this has shown up in the data between FY 2002 and FY 2012, although most of the decisions that led to the crisis were made in the previous decade.

The data shows that the people of New York City are among those who have been made worst off as a result of the rising cost of public employee pensions. There is more pension drama elsewhere simply because those living there are unwilling to live with the high tax burden and low public service levels (including 50 years of lousy schools) that have been imposed on New Yorkers since the 1970s. Those imposing that burden in New York benefit from low public participation in state and local government, something our state politicians go to great lengths to encourage. To show how and to what extent people are being affected, I have produced a spreadsheet that has tables with data for New York City and the Rest of New York State, and state and local government combined in all the other states and the U.S. as a whole. That spreadsheet, a series of charts, and commentary may be found below.

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